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Political Uncertainty and Policy Innovation

Author

Listed:
  • CHRISTOS KOTSOGIANNIS
  • ROBERT SCHWAGER

Abstract

Conventional wisdom has it that outside sources of information enhance the capability of political institutions to separate selfish from benevolent incumbents. This paper investigates, in the presence of innovative public policies whose outcomes are uncertain, the role of outside information and shows that it is more involved than typically thought. While it is true that enhanced information helps in separating politicians, it also creates an externality that reduces the incentives to experiment with innovative public policies.

Suggested Citation

  • Christos Kotsogiannis & Robert Schwager, 2006. "Political Uncertainty and Policy Innovation," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 8(5), pages 779-805, December.
    • Handle: RePEc:bla:jpbect:v:8:y:2006:i:5:p:779-805
    DOI: 10.1111/j.1467-9779.2006.00288.x
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    References listed on IDEAS

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    1. Lockwood, Ben & Le Borgne, Eric, 2004. "Do Elections Always Motivate Incumbents? Learning versus Re-election Concerns," CEPR Discussion Papers 4664, C.E.P.R. Discussion Papers.
    2. Timothy Besley & Andrea Prat, 2006. "Handcuffs for the Grabbing Hand? Media Capture and Government Accountability," American Economic Review, American Economic Association, vol. 96(3), pages 720-736, June.
    3. Laffont, Jean-Jacques, 2001. "Incentives and Political Economy," OUP Catalogue, Oxford University Press, number 9780199248681.
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    Cited by:

    1. Kotsogiannis, Christos & Schwager, Robert, 2006. "On the incentives to experiment in federations," Journal of Urban Economics, Elsevier, vol. 60(3), pages 484-497, November.
    2. Thushyanthan Baskaran & Lars P. Feld & Jan Schnellenbach, 2014. "Fiscal Federalism, Decentralization and Economic Growth: Survey and Meta-Analysis," CESifo Working Paper Series 4985, CESifo.
    3. Rincke, Johannes, 2005. "Yardstick Competition and Policy Innovation," ZEW Discussion Papers 05-11, ZEW - Leibniz Centre for European Economic Research.
    4. Mário Rubem Do Coutto Bastos & Mário Rubem Do Coutto Bastos, 2016. "Yardstick Competition E A Disciplina Eleitoral No Programa Bolsa Família," Anais do XLIII Encontro Nacional de Economia [Proceedings of the 43rd Brazilian Economics Meeting] 070, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    5. Ana B. Ania & Andreas Wagener, 2021. "Laboratory federalism with public funds sharing," Economic Inquiry, Western Economic Association International, vol. 59(3), pages 1047-1065, July.
    6. Melle Marco C., 2015. "Begünstigungen und Schranken in der europäischen Unternehmensbesteuerung – eine evolutorisch-ökonomische Sicht / Preferential treatments and barriers in the European company taxation – an evolutionary-economic perspective," ORDO. Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, De Gruyter, vol. 66(1), pages 115-146, January.
    7. Jean-Robert Tyran & Rupert Sausgruber, 2005. "The diffusion of policy innovations -an experimental investigation," Journal of Evolutionary Economics, Springer, vol. 15(4), pages 423-442, October.
    8. Hefeker, Carsten & Neugart, Michael, 2018. "Non-cooperative and cooperative policy reforms under uncertainty and spillovers," Journal of Comparative Economics, Elsevier, vol. 46(1), pages 94-102.
    9. Thushyanthan Baskaran & Lars P. Feld & Jan Schnellenbach, 2016. "Fiscal Federalism, Decentralization, And Economic Growth: A Meta-Analysis," Economic Inquiry, Western Economic Association International, vol. 54(3), pages 1445-1463, July.
    10. Michael Keen & Christos Kotsogiannis, 2003. "Leviathan and Capital Tax Competition in Federations," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 5(2), pages 177-199, April.
    11. Martin Gregor & Peter Tuchyňa, 2007. "Centralization Trade-off with Non-Uniform Taxation," Czech Economic Review, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, vol. 1(3), pages 223-253, November.
    12. Lars P. Feld & Horst Zimmermann & Thomas Döring, 2003. "Föderalismus, Dezentralität und Wirtschaftswachstum," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 72(3), pages 361-377.
    13. Hans-Günter Krüsselberg, 2005. "Milton Friedman und der Wissenschaftliche Beirat für Familienfragen Elternkompetenz und Anteilscheine am Schulbudget – Gedanken über Reformpotenziale," Marburg Working Papers on Economics 200506, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).

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    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H1 - Public Economics - - Structure and Scope of Government

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